American Chamber of Commerce of Mexico Address - Wednesday, June 8, 2011, Mexico City

June 08, 2011

Good morning and thank you for that kind introduction. It is wonderful to be here in Mexico City. This is my first time visiting the city and I’m pleased to have the opportunity to spend time with members of the chamber.

With nearly 100 years of experience promoting trade in Mexico and the United States, your organization and 1,500 member companies are a driving force for economic growth in the region.

As our economy continues to make a slow and steady recovery, the United States remains the leading partner in trade in this region.

During my time as Chairman, the demand for consumer products from this region and the number of exports to the U.S. from this region has started to rebound.

Imports from Mexico of consumer products that are likely to be under my agency’s jurisdiction reached its highest level in 2010, with an overall increase of 19 percent since 2006.

My agency recognizes that NAFTA has facilitated a constant flow of consumer electronics, lithium batteries, textiles, and other consumer products from Mexico City and towns along the border into the United States.

We also recognize that exporters based in other countries in the region and abroad are shipping consumer products through Mexico and in to the U.S.

This is why my agency’s Office of International Programs has a special focus on product safety in North America and why we have travelled to Mexico this week.

My goals for working with Profeco and with all of you are simple and straightforward.

First, I hope we can, over time, achieve better alignment of product safety standards and regulations whenever safety can be enhanced.

Second, I would like CPSC staff to do more training with Mexican manufacturers that export consumer products to the United States to ensure that safety is being built in all levels of the supply and distribution chains.

And third, I would like CPSC staff to find ways to engage in joint enforcement programs with our Mexican government counterparts—whether at our seaports, at our borders, or with products already on our markets.

Here is why I believe this final point is so important: the more violative products that can be screened and stopped before being exported, the greater the level of safety provided to the marketplace.

Increased cooperation between Mexican government agencies and the CPSC will increase our chances of preventing toys with small parts or counterfeit batteries from reaching the hands of American consumers.

Last year, our agency determined that more than 55 percent of the products that we sampled at U.S. ports were violative or dangerous to consumers. 2010 turned out to be a record year at CPSC for samples collected and samples found to be violative.

This was no accident. CPSC is committing more resources and more sophisticated technologies to our import surveillance effort.

The reason I am emphasizing this message today is to make sure all of you know that CPSC is getting better at catching the bad imports, so that the good ones can flow through the system faster.

The transnational impact of NAFTA is that with expanded trucking into the United States, there is the potential for an increase in violative goods heading north by land, rather than by sea.

We do not want to hold up trade. We want trade and safety to be interconnected.

When that truck carrying a shipment of children’s sleepwear or toys reaches a U.S. checkpoint, we want trade and safety to come together to help keep that shipment moving to its retail destination.

The vision I have as Chairman is for CPSC to foster cooperative relationships with foreign manufacturers, stakeholders, and regulators. A relationship based on a common understanding that the more proactive we are, the more likely we are to prevent injuries to consumers using imported products.

I believe we can achieve this vision if manufacturers build products to the latest safety standards and if regulators can continue to converge on the best and safest standards.

If our regulatory partners can join us in identifying unsafe products that may have been exported to the United States, CPSC also can be more effective in its interdiction efforts at our ports.

Now some of you here today may be seeking an update and discussion about the Consumer Product Safety Improvement Act. So let me spend a few minutes summarizing what CPSC achieved last year in implementing the CPSIA and what lies ahead this year.

In 2010, we continued to ensure that makers of children’s products complied with the stringent lead limits. The toy industry, in particular, had a good year.

In 2010, there were only three recalls of toys in the United States due to violations of the CPSIA’s lead requirements.

That’s tremendous progress.

The CPSIA mandates that by August 2011, we must drop the total lead limit to 100 parts per million—unless it is not technologically feasible for a product or product category.

The Commission solicited and received a substantial amount of input from key stakeholders, and now we are working to determine whether this is technological feasible.

In 2010, we vowed to not repeat the mistakes of the past and we got ahead of the curve on cadmium in children’s products.

The CPSIA only sets a cadmium regulation for surface coatings on toys. So I delivered remarks in Hong Kong last year that warned manufacturers not to substitute cadmium for lead in metal jewelry and other children’s products.

The warning I gave was actually very similar to a directive on cadmium that the Chinese government sent to manufacturers just a few weeks after I spoke. My words last year certainly still apply this year.

In fact, I believe that all toxic metals need to come out and stay out of toys and children’s products.

The time is right to expand our vision beyond lead and cadmium, because the CPSIA addresses more than lead and cadmium. Antimony, arsenic, mercury, chromium, barium and selenium are now in our sights.

Like lead and cadmium, these are bad metals for children to be exposed to; and there is no good reason to use these metals in the manufacture of toys or other children’s products.

I have called upon all manufacturers, exporters, and retailers of children’s products to take the necessary steps to ensure that final products do not contain these or other harmful metals or chemicals.

CPSC staff is actively engaged in scientific work aimed at putting us in a leadership role to address these dangerous metals.

In 2010, we focused on establishing new national requirements for various juvenile products, as required by the CPSIA. The Commission approved new, mandatory rules for baby walkers and infant bath seats.

Indeed, one of CPSC’s biggest moments of 2010 came when we established for the first time in 30 years, new and improved requirements for baby cribs.

So many families in the United States have suffered unspeakable tragedies due to defective cribs that contributed to the death of their baby. Our new rules were approved in December and go into effect on June 28, which is fast approaching.

You may have heard that the rules do away with dangerous, traditional drop-side cribs, but the rules also improve the hardware, mattress supports, and the slat strength. Improved testing and certification is also a requirement.

I am confident that a new generation of safer cribs are about to hit the market in the United States as a result of our new rules.

We have also established new federal safety rules for toddler beds, infant walkers, and baby bath seats.

Bassinets, cradles, baby hammocks, play yards, strollers, high chairs, and other juvenile products will be subject to U.S. requirements over the next few years.

Some of you may have heard about a new consumer database of product incident reports that we created.

This database—which is found on the website SaferProducts.gov—is one of the most significant requirements of the CPSIA and one that I have supported from my first day as Chairman.

The staff at CPSC worked very hard on this project to get it right and I am pleased to say they got it right.

Consumers in the United States are now able to use this online database to report product incidents to the government and have open access to search for incidents of harm that other consumers have reported.

There are more than 1,000 incident reports involving consumers that you can view right now on SaferProducts.gov.

I believe that an informed consumer is an empowered consumer and this is another example of how CPSC is creating tools to empower consumers.

It is very important to me that members of the chamber know that manufacturers have certain protections in the database process.

If a consumer submits a report of harm involving a product made in this region, the manufacturer or private labeler will be notified by CPSC staff within five days of what the report claims.

The manufacturer or private labeler will then have 10 days to respond to CPSC if they believe information in the report is materially inaccurate or confidential.

Information within a report that a manufacturer believes is materially inaccurate will not be posted or will be removed from the database once the agency determines whether the information is materially inaccurate.

Information within a report that a manufacturer believes is confidential will not be posted on the database unless the agency determines that it is not confidential.

The goal is have a report—free of materially inaccurate or confidential information—posted onto the database within 15 days of CPSC first receiving it.

When the report goes up for the public to see, the manufacturer or private labeler has the option and right to post a comment responding to the report. CPSC will attach the comment to the consumer’s report of harm for the public to see.

CPSC staff is continuing to educate the business community about what the CPSIA requires, how SaferProducts.gov will operate, and how a special business portal is being by many businesses to expedite delivery of a report of harm.

Those are the most significant CPSIA highlights from the past year and for the new year.

With all that the CPSIA has meant to my agency and this region, I want to recognize the positives that have come from the law.

The changes made by certain industries in the supply chain and in testing are helping to restore the confidence of American parents.

Parents are more confident that lead is not being added to toy paints or substrates; they are more confident that standards are being strengthened; and they are more confident that children’s products are being tested.

We must keep up consumer confidence by continuing to put up safeguards in the manufacturing process.

Many of the product recalls that CPSC announced last year were tied to a theme that I have spoken about repeatedly: manufacturers need to design out product hazards and build in safety.

Building safety into a toy, a computer, a window covering, or a children’s garment, means always following the appropriate mandatory and voluntary standards.

It is important also to consider foreseeable use and misuse of a product. This is the only way to ensure that a product will maintain its integrity and safety.

As I stated earlier, prevention must win out over reaction—from manufacturing to distribution, industry must work to prevent injuries by taking every step possible to build safety into the product.

From the start of my tenure as Chairman of the CPSC in June 2009, I said that I would be a firm, but fair, regulator.

I believe part of being fair is making sure you know what CPSC is working on that could impact the work of the chamber.

My visit to Mexico City is part of this effort.

Another key component is CPSC’s creation of an Office of Education, Global Outreach, and Small Business Ombudsman. Establishing this office has been a priority of mine for quite some time, and the Commission approved it last Fall.

Through the excellent work of our Global Outreach team, we are looking to bolster our visibility in North America, Latin and South America this year.

In fact, I will be travelling to Rio de Janeiro this week for meetings with key regulatory and manufacturing officials.

Coming back to the new Office of Education, Global Outreach, and Small Business Ombudsman, it will play a vital role in coordinating education activities for international stakeholders, including manufacturers, importers, and foreign governments.

We realize that many manufacturers may not know where to turn for information on our regulations, or they might experience difficulty accessing the information needed to fully address safety in the manufacturing process.

I trust that by enhancing CPSC’s ability to address the questions and concerns of the regulated community, our agency can facilitate the transfer of knowledge across industries.

The Office of Education, Global Outreach, and Small Business Ombudsman has the potential to increase our focus on important issues, such as quality assurance in the manufacturing process.

CPSC has long maintained that enhanced quality assurance programs assist manufacturers in producing products that comply with relevant safety standards.

During my travel overseas, I learned early on that some foreign governments need help in developing their product safety systems.

I had quite a memorable trip to Hanoi within weeks of taking office in 2009. The Vietnamese government could not have been more welcoming. In fact, they would have been happy if other agency officials and I could have stayed for a few months to help companies in their country learn U.S. safety requirements.

We need to be ready to help the countries like Vietnam implement the necessary controls so that the import problems we have experienced do not materialize again in those countries.

This new Office of Education, Global Outreach, and Small Business Ombudsman will serve as a coordinated business unit to carry out this activity and allow CPSC to enhance its outreach to the international community generally.

By working with foreign regulators and industries, we can help them develop effective product surveillance strategies, product testing methods, and voluntary and mandatory product safety standards.

I am very excited about the potential of this new office.

We are on the verge of even greater things at CPSC in 2011, as this will be the first full year of implementing CPSC’s new, five-year strategic plan.

This plan is designed to establish CPSC as the global leader in consumer product safety.

The five goals of our Strategic Plan are:

Leadership in safety: we will establish ourselves as leaders in identifying and addressing the most pressing consumer product safety priorities and mobilizing action by our partners;

Commitment to prevention: we will engage our stakeholders to ensure that the products consumers purchase are as safe as possible;

Decisive response: we will use our full range of authorities to quickly remove hazards from the marketplace; and

Raising awareness: we will promote a public understanding of product risks and CPSC capabilities.

This new plan was builds upon a vision of a CPSC that is more focused on injury prevention and a CPSC that works proactively with global manufacturers and suppliers to build safety into their products.

I have focused a lot on these two themes today, because I believe lives can be saved and injuries can be prevented if we are proactive and collaborative.

If we are partners in this effort, I know that we can build upon the progress that has been made in recent years.

Progress that will help us move together to further reduce product recalls.

Progress that will help us move together to reduce product related injuries to children.

Progress that will help to ensure that U.S. consumers appreciate the quality and safety of goods made in your home country.

Thank you all for coming out this morning. And I want to thank the chamber once again for inviting me to spend some time with all of you.

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